Dec 2018 Westside Market Update

The supply of Westside detached homes in December is down 12% from November (652 from 740) and up 6% compared to December 2017. Westside detached home sales (demand) this December were down 47% from November (32 from 60) and down 9% compared to 35 sales in December 2017. December sales are down 61% from the 10 year December average of 83 sales.

Months of Supply (MOS) was up 65% from last month to 20.4 and up 16% from 17.6 in December 2017. (Usually a balanced market is in the range between 4-7 MOS with prices rising below 4 MOS and falling above 7 MOS). With MOS at 20.3, the average detached home price has decreased 13% to at $3.162M. The median price however was up 1.3% to $2.962M from $2.925M last month. This is a drop of 29% on average & 23% on median from the peak in 2017. If demand stays low, MOS will stay high and we should see continued downward pressure on prices.

The highest sale price for a Westside detached home in December was $5.98M. The lowest price was $1.5M. Of those sales, 3 received the asking price or more and 29 sold below the asking price. The implication of this is that with a sufficiently attractive (low) asking price we can still generate multiple offers.

Westside apartment supply decreased 20% to 1094 units from 1359 units in November but this is up 104% from the 535 listings we had in December 2017. At the same time, Demand decreased 33% to 139 sales in December from 207 sales in November and this is down 45% from 251 sales in December 2017.

MOS in December is up 20% to 7.9 from 6.6 in November and up 269% from 2.1 last December 2017. The average price decreased 7.5% to $944K from $1021K in November and was down 2% from December 2017. The median price decreased 4.5% to $745K from $780K in November and is down 2% from last December. Both average and median prices are down by 21% & 15% from the peak of $1.199M and $880K in January 2018.

Westside townhouse supply decreased 24% this December to 182 homes from 240 in November but that's up 43% from 127 in December 2017. Demand in December is down 38% to 18 sales from 29 in November and down 31% from 26 sales last December 2017. With supply and demand both down the current MOS increased to 10.1 from 8.3 in November and from 4.9 in December 2017. Average prices increased 2.5% to $1.275K from $1.244K in November and were down 23% from $1.663M last December 2017. Median prices increased 9% to $1.31M from $1.2M in November and are down 19% from $1.61M in December 2017. As with apartments, townhouse prices are down (29% average and 14% median) from the peak prices last January 2018.

Detached, Attached and Apartments on the west side are still experiencing price reductions and while this is creating good buying opportunities, some buyers continue holding off in anticipation of further declines. This should exacerbate the decline and soften prices further.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region dropped 46.8% to 1,072 this December from 2,016 sales in December 2017. December's sales were 43.3% below the 10-year December sales average and the lowest since 2000.

The total number of properties currently offered on the MLS® system in Metro Vancouver is up 47.7% from December 2017 to 10,275.

For all property types, the sales-to-active listings ratio for December 2018 is 10.4%. By property type, the ratio is 7.1% for detached homes, 12% for town homes, and 14.2% for apartments.

Downward pressure on home prices occurs when the ratio dips below the 12% mark for a sustained period, while upward pressure occurs when it surpasses 20% over several months.

It is important to keep a global perspective these days and Vancouver is not the only place where the real estate market is retracting; Toronto sales & prices are also down. Beijing & Shanghai prices are off. London prices have fallen 2 years in a row. Hong Kong prices are off. Singapore prices are off and even Sydney Australia prices are off.

A Bloomberg article Jan.3rd suggests there are some common factors continuing to depress prices in all these areas include government regulations on financing (stress test requires qualifying at 2% above current rates, decreasing loan to value ratios, increasing interest rates, and increased property transfer taxation), stock market uncertainties & flagging Chinese demand everywhere due to the Chinese government restricting cash outflows from China.

It almost suggests collusion but I think it is more likely political tinkering with the result of unintended consequences.

So with market prices declining across the region, there may be good buying opportunities compared to the all time high prices experienced last year.

Meanwhile new assessment values for BC homeowners is now available and BC Assessment Authority (BCAA) has said that assessed value (AV) for over 2 million BC properties has increased by 7.45% to approx. $1.99 trillion dollars.

What this must mean is that everyone but the Vancouver (down 4%) and West Vancouver (down 12%) homeowners have experienced an increase in AV over 2018. Click this link to BCAA data

Further, detached homes fared worse than apartments and town houses so the 4% drop they ascribe to Vancouver is way short of the actual numbers for west side detached homes.

The question remains as to how our market responds this spring and as always listings are up so all we need now are the sale

Please call me at any time for a considered response to any and all of your real estate questions

Happy New Year and all the best for 2019!

Best regards,

Stuart

This representation is based in whole or in part on data generated by the Chilliwack & District Real Estate Board, Fraser Valley Real Estate Board or Real Estate Board of Greater Vancouver which assumes no responsibility for its accuracy - Listing data updated on March 21, 2019.